Canadian furniture chains Leon’s and The Brick are joining forces, but will still be marketed under separate banners.

Terry Leon, third generation leader of the family furniture business, has high hopes for the firm’s takeover of The Brick.

By:Francine KopunBusiness Reporter, Published on Sun Nov 11 2012

Leon’s Furniture Ltd. has bought its competitor The Brick Ltd. in a deal worth roughly $700-million, it was announced Sunday.

Leon’s will pay $5.40 per share, representing a premium of about 62 per cent on Friday’s closing price of $3.50 for The Brick shares on the Toronto Stock Exchange.

The two chains will continue to be marketed under separate banners, with administrative offices in Toronto and Edmonton, where The Brick was founded in 1971.

“During these economic times, where we have seen multiple American corporations make inroads in our country through acquisitions, it is a pleasure to see two successful Canadian retailers reach such an agreement that will better serve Canadian consumers,” said to Terry Leon, president and chief executive officer of Leon’s.

In a release issued Sunday night, Leon said the transaction will give the brands access to national buying opportunities in merchandising and marketing and a national distribution network that will enhance online shopping capabilities.

Leon’s, founded in 1909, currently operates 76 stores across all provinces except British Columbia. The Brick opened its first store in Edmonton in 1971 and has 230 stores operating under multiple banners, including The Brick, United Furniture Warehouse, The Brick Mattress Store and Urban Brick.

Terry Leon will remain CEO of Leon’s and will be CEO of the combined entity. Vi Konkle, who was president and CEO of The Brick, will still be president of The Brick.

Bill Gregson, who stepped down as president and CEO of The Brick in April 2011 to become executive chairman of the board, will stay on as an adviser and is expected to join the Leon’s board. Mark J. Leon will continue as chairman of the board at Leon’s.

Four shareholders — William Comrie, the founder of The Brick; Fairfax Financial Holdings Ltd., a Toronto-based financial services holding company; Chou RRSP Fund; and Gregson — owned about two-thirds of all The Brick stock. They have entered into irrevocable voting support of the deal.

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